Institutions, Technological Change and Economic Growth.

Theories of economic growth try to explain variations in per capita income across countries by differences in capital accumulation and productivity. However, many scholars consider that integrating institutions into economic theory and economic history is an essential step in improving explanations of why some societies are richer than others. This paper develops the empirical and theoretical case that differences in institutions are the fundamental cause of differences in technological change (productivity), hence in economic growth. First, I give a definition of institutions and how they influence economic performance, from a New Institutional Economics point of view. Then, I introduce the theoretical framework based on the economics of ideas and endogenous growth models. Finally, I argue that R&D expenditures -a proxy for technological change- will vary across countries depending on some measures of institutional quality. In the end, this paper finds that stronger institutions (measured by an aggregate of institutional quality) encourage greater R&D expenditures. At a disaggregate level, the rule of law is positively correlated and the regulatory burden is negatively correlated with R&D expenditures. Human capital level (measured by the tertiary and primary school enrolment rates) has also a significant positive impact in R&D expenditures.

Institutions, Technological Change and Economic Growth

Theories of economic growth try to explain variations in per capita income across countries by differences in capital accumulation and productivity. However, many scholars consider that integrating institutions into economic theory and economic history is an essential step in improving explanations of why some societies are richer than others. This paper develops the empirical and theoretical case that differences in institutions are the fundamental cause of differences in technological change (productivity), hence in economic growth. First, I give a definition of institutions and how they influence economic performance, from a New Institutional Economics point of view. Then, I introduce the theoretical framework based on the economics of ideas and endogenous growth models. Finally, I argue that R&D expenditures -a proxy for technological change- will vary across countries depending on some measures of institutional quality. In the end, this paper finds that stronger institutions (measured by an aggregate of institutional quality) encourage greater R&D expenditures. At a disaggregate level, the rule of law is positively correlated and the regulatory burden is negatively correlated with R&D expenditures. Human capital level (measured by the tertiary and primary school enrolment rates) has also a significant positive impact in R&D expenditures

Institutions, Technological change and Economic Growth

Las teorías del crecimiento económico intentan explicar las variaciones en las rentas per capita en los países por diferencias en la acumulación de capital y en la productividad. No obstante, muchos investigadores consideran que integrar instituciones en la teoría y la historia económica es un paso esencial para dar una mejor respuesta a por qué algunas sociedades son más ricas que otras. Este artículo desarrolla el caso empírico y teórico de que las diferencias en las instituciones son la causa fundamental de las divergencias en el cambio tecnológico (productividad) y, por tanto, en el crecimiento económico. En primer lugar, daré una definición de instituciones y cómo influyen en el rendimiento económico, desde un punto de vista de la Nueva Economía Institucional. Seguidamente, introduzco el marco teórico basado en la economía de ideas y en los modelos de crecimiento endógeno. Finalmente, argumento que el gasto en I+D (poder para el cambio teconológico) variará en cada país dependiendo de algunas medidas de calidad institucional. Al final, en este artículo se observa que las instituciones más fuertes (medidas por un conjunto de calidad institucional) fomentan un mayor gasto en I+D. A nivel disgregador, el Estado de Derecho está correlacionado positivamente y la carga reguladora está correlacionada negativamente con el gasto en I+D. El nivel de capital humano (medido por las tasas de matriculación en la educación primaria y superior) también tiene un impacto positivo en el gasto en I+D